EA is being sued in Canada over illegal gambling via loot boxes

[Delicieuxz]

EA facing Canadian class action lawsuit over loot boxes

Quote

According to the filing, shared by gaming and esports law blog The Patch Notes, Sutherland is a British Columbia resident who purchased loot boxes in the Madden NFL series of games while Moore hails from Ontario and spent money on the same monetisation model in EA's NHL games.

 

The pair assert that the Criminal Code of Canada prohibits unlawful gaming, betting, lotteries and games of chance.

 

Since EA does not hold a gambling license in the region, it is accused of operating "an unlicensed, illegal gaming system through their loot boxes."

 

The lawsuit is filed on behalf of Moore, Sutherland and any other Canadian customers who purchased, directly or indirectly, loot boxes in almost every EA game that contains loot boxes.

...
 

"The senior officers and directors of [Electronic Arts] were at all times fully aware of the unlawful nature of their enterprise and took active steps to carry it out," the filing reads.

EA has been hit previously in the UK, Belgium, the Netherlands, and the US over its in-game gambling loot box systems. But is this the first time it's being targeted in Canada? The more the merrier, I think, when it comes to lawsuits and regulation against game-destroying, predatory practices.

 

EA: Loot boxes actually “surprise mechanics” that are “ethical and fun”

 

15 European gambling regulators (and Washington state) unite to tackle loot box threat

 

EA facing class action lawsuit over Ultimate Team loot boxes - Plaintiff claims FIFA and Madden violate California gambling laws

 

 

 

 

[HanZie82]

If only we could make it so they actually go byebye.

And i completely agree gambling should not be allowed for young children.
Like 16+ at least, and if money is involved 18+

 

But remove all gambling completely from games would also not be to bad imho.

[TetraSky]

HAHAHAHAHAHA.

 

Now to watch them squirm and try to argued, once again, that lootboxes, a game of "chance" that you pay money for the possibility of getting the prize you want, is not gambling somehow.

[Master Disaster]

Unfortunately this will more than likely fail. I'm not familiar with Canadian laws but generally speaking, for something to class as "Gambling Gaming" it has to have a way to cash out your winnings and since EA don't offer any way to convert digital items to anything with real world value their current tactics technically are not gambling.

 

What is needed is a change in the law to take lootboxes into account.

[Master Disaster]

16 minutes ago, TetraSky said:

HAHAHAHAHAHA.

 

Now to watch them squirm and try to argued, once again, that lootboxes, a game of "chance" that you pay money for the possibility of getting the prize you want, is not gambling somehow.

Technically it isn't

 

Just now, Master Disaster said:

Unfortunately this will more than likely fail. I'm not familiar with Canadian laws but generally speaking, for something to class as "Gambling Gaming" it has to have a way to cash out your winnings and since EA don't offer any way to convert digital items to anything with real world value their current tactics technically are not gambling.

The law needs to catch up, and quickly because as good ol Jim Sterling says "If it looks like gambling and it smells like gambling then it probably is gambling".

[Techstorm970]

EA stands for Extreme Assholes.  I mean, it doesn't, but it might as well!

 

Alright, neighbors up north!  Way to whip out those hockey sticks!  Time to score a goal for all of us!

[CTR640]

Don't worry, guys! EA will live forever thanks to FIFA sheeps that keeps buying the same yearly shit every year!

[wanderingfool2]

25 minutes ago, Master Disaster said:

The law needs to catch up, and quickly because as good ol Jim Sterling says "If it looks like gambling and it smells like gambling then it probably is gambling".

I haven't read the full law, but my guess from skimming it lootboxes might actually be included...to me it seemed a bit vague in their definition.

 

It all comes down to where the line in the sand is drawn though.  Should McDonald's Monopoly days be considered gambling?  The funny thing though is that EA could have more easily gotten around this by making a skill testing question (for BC anyways...as it becomes a game of chance and skill at that point).  Anyways, I do think EA's use of lootboxes should constitute as gambling...but it does bring in question of where does one draw the line.

[Donut417]

6 hours ago, Master Disaster said:

What is needed is a change in the law to take lootboxes into account.

This is likely what will trigger that. When the regulator fails to hold EA accountable, the law will likely be changed. 

 

 

[Trik'Stari]

1 hour ago, Donut417 said:

This is likely what will trigger that. When the regulator fails to hold EA accountable, the law will likely be changed. 

That depends on whether or not the officials in question have both the integrity to do so, and the brain cells available to understand the concept that loot boxes are in fact gambling.

 

Considering that the only two things government actually generates are corruption and incompetence, I remain skeptical.

[Dabombinable]

9 hours ago, TetraSky said:

HAHAHAHAHAHA.

 

Now to watch them squirm and try to argued, once again, that lootboxes, a game of "chance" that you pay money for the possibility of getting the prize you want, is not gambling somehow.

In some countries the only thing stopping lootboxes from being gambling is the inability to cash out. Which IMO makes the gambling even worse.

[Delicieuxz]

13 hours ago, Master Disaster said:

Unfortunately this will more than likely fail. I'm not familiar with Canadian laws but generally speaking, for something to class as "Gambling Gaming" it has to have a way to cash out your winnings and since EA don't offer any way to convert digital items to anything with real world value their current tactics technically are not gambling.

 

What is needed is a change in the law to take lootboxes into account.

 

4 hours ago, Dabombinable said:

In some countries the only thing stopping lootboxes from being gambling is the inability to cash out. Which IMO makes the gambling even worse.

 

I know that cashing-out winnings into money was someone's preferred definition somewhere (probably a publisher's), but I don't think that's a universal condition, legally or otherwise. Nor is it a part of the definition of the words "gamble" and "gambling".

 

Gambling is making a wager on a game of stakes, and whether the stakes are for money or something else is irrelevant. When you put something on the line for the mere chance that you might get something else, you're gambling whatever it is you put on the line. Gambling is defined by the act of putting something on the line, and not by the outcome of receiving money or exchanging winnings into money.

 

In the case of loot boxes, you're gambling your money (which might be converted into in-game credits) on the chance you'll get an item you like.

 

 

https://www.dictionary.com/browse/gamble

1. to play at any game of chance for money or other stakes.
2. to stake or risk money, or anything of value, on the outcome of something involving chance: to gamble on a toss of the dice.

 

https://www.dictionary.com/browse/gambling

1. the activity or practice of playing at a game of chance for money or other stakes.

2. the act or practice of risking the loss of something important by taking a chance or acting recklessly: If you don't back up your data, that's gambling.

 

 

https://www.merriam-webster.com/dictionary/gamble

1a: to play a game for money or property
b: to bet on an uncertain outcome
2: to stake something on a contingency (see CONTINGENCY sense 1) : take a chance

 

https://www.merriam-webster.com/dictionary/gambling

the practice or activity of betting : the practice of risking money or other stakes in a game or bet

 

 

https://thelawdictionary.org/gambling/

Betting; wagering. Results in either a gain or total loss of wager, the money or asset put up. Neither risk-taking nor investing, nor like insurance. Risk taking or speculation takes on substantial short-term risk to potentially get high gain. Investing uses property or assets to potentially increase in worth, securing long-term capital gains. Insurance can prevent financial loss but has no way to gain.

 

 

https://thelawdictionary.org/gaming/

In general, the words “gaming” and “gambling, in statutes, are similar in meaning, and either one comprehends the idea that, by a bet, by chance, by some exercise of skill, orby the transpiring of some event unknown until it occurs, something of value is, as the conclusion of premises agreed, to be transferred from a loser to a winner, without which latter element there is no gaming or gambling.

[Kisai]

12 hours ago, Delicieuxz said:

EA facing Canadian class action lawsuit over loot boxes

EA has been hit previously in the UK, Belgium, the Netherlands, and the US over its in-game gambling loot box systems. But is this the first time it's being targeted in Canada? The more the merrier, I think, when it comes to lawsuits and regulation against game-destroying, predatory practices.

 

EA: Loot boxes actually “surprise mechanics” that are “ethical and fun”

 

15 European gambling regulators (and Washington state) unite to tackle loot box threat

 

EA facing class action lawsuit over Ultimate Team loot boxes - Plaintiff claims FIFA and Madden violate California gambling laws

 

 

 

 

I saw this news like two or three days ago and was wondering when someone would drop it here.

 

EA has an actual presence in Canada, in BC, EA sports is actually the main thing they produce, and hence this is an excellent target.

 

Loot Boxes, gachapon, and similar ideas are ultimately ruining games. In multiplayer games, they added a bit of variety to what was otherwise "buy this thing in the cash shop" then it turned into "you can only get this rare thing 1% chance".

 

The kind of thing that annoys me a lot in these types of mechanics are when they play by the "use duplicates to level" mechanic, because the game does not guarantee you that odds, assuming you always got it on that 1%, and you need 5, you need 500 pulls of the thing, and when each "10 pull" is like $25, it's like the bare minimum you have to be prepared to spend is $125. Like geezus, these are games that should have cost no more than $60 in the first place.

 

Governments should apply the gambling laws directly to these, or apply a cap to the amount of money that can be spent on "premium currency" to $100 per publisher, per customer.

 

Gambling addicts are extremely susceptible to these mechanics, and that is why it should be regulated like such.

[Master Disaster]

5 hours ago, Delicieuxz said:

 

 

I know that cashing-out winnings into money was someone's preferred definition somewhere (probably a publisher's), but I don't think that's a universal condition, legally or otherwise. Nor is it a part of the definition of the words "gamble" and "gambling".

 

Gambling is making a wager on a game of stakes, and whether the stakes are for money or something else is irrelevant. When you put something on the line for the mere chance that you might get something else, you're gambling whatever it is you put on the line. Gambling is defined by the act of putting something on the line, and not by the outcome of receiving money or exchanging winnings into money.

 

In the case of loot boxes, you're gambling your money (which might be converted into in-game credits) on the chance you'll get an item you like.

 

https://thelawdictionary.org/gambling/

Betting; wagering. Results in either a gain or total loss of wager, the money or asset put up. Neither risk-taking nor investing, nor like insurance. Risk taking or speculation takes on substantial short-term risk to potentially get high gain. Investing uses property or assets to potentially increase in worth, securing long-term capital gains. Insurance can prevent financial loss but has no way to gain.

 

 

https://thelawdictionary.org/gaming/

In general, the words “gaming” and “gambling, in statutes, are similar in meaning, and either one comprehends the idea that, by a bet, by chance, by some exercise of skill, orby the transpiring of some event unknown until it occurs, something of value is, as the conclusion of premises agreed, to be transferred from a loser to a winner, without which latter element there is no gaming or gambling.

Ignoring the dictionary definitions because, quite honestly, it couldn't matter any less how the dictionary defines something. If we took the dictionary definitions at face vale then Kinder Eggs, Trading Cards, Kids Sticker Packs and anything else you buy where you can't see what's inside before you buy it would all count as gambling.

 

Notice how all the law definitions state there must be a chance to either win or lose something with actual value otherwise it is not gambling.

 

Gambling has to offer the player the chance to win or lose money or something with actual real world value. Lootboxes do not offer a way to win anything with any real world value therefore they are not technically gambling until laws are amended.

[Delicieuxz]

47 minutes ago, Master Disaster said:

Ignoring the dictionary definitions because, quite honestly, it couldn't matter any less how the dictionary defines something. If we took the dictionary definitions at face vale then Kinder Eggs, Trading Cards, Kids Sticker Packs and anything else you buy where you can't see what's inside before you buy it would all count as gambling.

 

Notice how all the law definitions state there must be a chance to either win or lose something with actual value otherwise it is not gambling.

 

Gambling has to offer the player the chance to win or lose money or something with actual real world value. Lootboxes do not offer a way to win anything with any real world value therefore they are not technically gambling until laws are amended.

The part you've bolded in the definition for Gambling is listed as examples of what gambling isn't:

 

"Neither risk-taking nor investing, nor like insurance. Risk taking or speculation takes on substantial short-term risk to potentially get high gain. Investing uses property or assets to potentially increase in worth, securing long-term capital gains. Insurance can prevent financial loss but has no way to gain."

 

It's saying that gambling is different than investing and insurance. The part of the paragraph which defines gambling is this:

 

"Betting; wagering. Results in either a gain or total loss of wager, the money or asset put up."

 

In that definition, there isn't a requirement that any real-world monetary value can be received - only that something is gained. Receiving digital items you didn't have before is gaining something.

 

 

In the part you've bolded in the definition for Gaming, it only says something of value - so, not specifically money, nor does it say it must have physical or real-world value. It simply must be something of value that is transferred from the loser to the winner.

 

If what's behind loot boxes didn't have value, then people wouldn't have to pay money for them. And if a digital asset has no value, then pirating software would be justified because it isn't stealing any value from anyone.

 

When the player has to pay for the chance to win whatever's inside of a loot box, then there is already value attached to the potential prize, since there must be perceived value in order for there to be motivation for players to pay in order to hopefully get them. And if chance favours the player, then the ownership of the digital asset revealed by the unveiling of the items in the loot box transfers to the player.

[RejZoR]

15 hours ago, TetraSky said:

HAHAHAHAHAHA.

 

Now to watch them squirm and try to argued, once again, that lootboxes, a game of "chance" that you pay money for the possibility of getting the prize you want, is not gambling somehow.

It's not gambling, it's surprise mechanic!

[Master Disaster]

1 hour ago, Delicieuxz said:

The part you've bolded in the definition for Gambling is listed as examples of what gambling isn't:

 

"Neither risk-taking nor investing, nor like insurance. Risk taking or speculation takes on substantial short-term risk to potentially get high gain. Investing uses property or assets to potentially increase in worth, securing long-term capital gains. Insurance can prevent financial loss but has no way to gain."

 

It's saying that gambling is different than investing and insurance. The part of the paragraph which defines gambling is this:

 

"Betting; wagering. Results in either a gain or total loss of wager, the money or asset put up."

 

 

In the part you've bolded in the definition for Gaming, it only says something of value - so, not specifically money, nor does it say it must have physical or real-world value. It simply must be something of value that is transferred from the loser to the winner.

 

If what's behind loot boxes didn't have value, then people wouldn't have to pay money for them.

 

In the case of loot boxes, what's in them has value, since the player has to pay for the chance to win them, and since there is motivation for players to pay in order to hopefully get them. And if chance favours the player, then the ownership of the digital asset revealed by the unveiling of the items in the loot box transfers to the player.

The items contained in lootboxes only have value to someone who is interested in owning them. Try using your Messi FUT card to pay your phone bill and see what happens.

 

Their 'value' is purely artificial.

 

What you're getting into now is the difference between something being actually valuable (fiat currency, precious metals, bonds, stocks, liquid assets) and something being valuable because of desirability and scarcity. A perfect example right now is Nvidia's 3000 series, are 3080s actually worth £1500? No. Are people paying that right now? Yes. Why? Because they are rare and desirable. Remember when NES Minis were selling for £200 on eBay? Now my local pawn shop has 20 of em and is selling them for £20.

 

Also you must remember that, at the end of the day these are nothing but ones and zeroes on a HDD somewhere.

 

A Messi card might be valuable to 0.00001% of people on planet Earth, that doesn't mean its a valuable commodity.

 

Edit - Its also important to talk about the term "game of chance" as IMO this is actually where current laws fall short. The phrase "game of chance" has an inherent inference that there is a chance to either win or lose. You pay money/goods and you might walk away with something more valuable or you might end up with nothing. The thing with lootboxes is there's no chance of losing, you're always going to get something and the 'value' of the item you get is determined by its rarity.

 

Digging even deeper into this you can also say the phrase infers there's a chance the house might lose. Its entirely possible for someone to walk into a casino, place one bet and walk away with the jackpot. In the case of lootboxes there is no chance for the devs to lose, at all. Its actually closer to paying money for goods and services than it is to a game of chance for them. They have total control over what happens in their game, in a casino there is an element of luck & skill involved. Cards have 52 in a deck, craps has 100s of possible outcomes etc etc.

 

Currently lootboxes fall into the same category as sticker packs and trading cards. The reason why (at least IMO) this shouldn't be the case is because lootboxes employ tactics that are used in casinos to keep players spending money. Everything is bright and shiny, there are flashing lights and sounds and items are revealed slowly. All these tactics are designed to stimulate players into forgetting they are spending money and to focus purely on that one item they have made so rare.

 

I think the problem stems from the fact that current laws were drawn up LOOOOOONG before digital items ever existed. When current laws say 'value' they literally mean real world value since back then, digital value didn't even exist.

[Drama Lama]

They aren’t lootboxes they are surprise mechanics

[Drama Lama]

19 minutes ago, RejZoR said:

It's not gambling, it's surprise mechanic!

It’s not an invasion it’s a surprise freedom 

[Delicieuxz]

1 hour ago, Master Disaster said:

The items contained in lootboxes only have value to someone who is interested in owning them. Try using your Messi FUT card to pay your phone bill and see what happens.

 

Their 'value' is purely artificial.

 

What you're getting into now is the difference between something being actually valuable (fiat currency, precious metals, bonds, stocks, liquid assets) and something being valuable because of desirability and scarcity. A perfect example right now is Nvidia's 3000 series, are 3080s actually worth £1500? No. Are people paying that right now? Yes. Why? Because they are rare and desirable.

The player paying for loot boxes has an interest in owning the items within them.

 

But the Black's definition of Gambling only says that a bet "Results in either a gain or total loss of wager". So, it doesn't even say that whatever's received has to have value of any sort, only that something is gained. Receiving digital items which weren't owned before the wager is a gain.

 

 

But regarding the interpretation of Value, it's notable that the lawyers presenting the lawsuit against EA in California and other places regard EA's loot boxes to be violating gambling laws, and they argue that the in-game items received from look boxes are items of value. Belgium ruled that loot boxes constitute gambling, and so EA is no longer allowed to offer them in that country. The UK’s Digital, Culture, Media and Sport Committee has advised the UK government to regulate loot boxes under the UK's gambling laws.

 

So, in the eyes of various governmental groups and legal experts, Value doesn't strictly mean something that's able to be easily transferred into real-world money.

 

1 hour ago, Master Disaster said:

Also you must remember that, at the end of the day these are nothing but ones and zeroes on a HDD somewhere.

So is the Windows OS and all the games sold on GoG, Steam, EGS, Uplay, etc.

 

When a publisher argues that loot box rewards don't have real-world value, they're undermining their ability to justify their interests against software piracy. If those items don't have monetary value, then it cannot be said that people are causing publishers any monetary damages by pirating their software products.

[Master Disaster]

58 minutes ago, Delicieuxz said:

The player paying for loot boxes has an interest in owning the items within them.

 

But the Black's definition of Gambling only says that a bet "Results in either a gain or total loss of wager". So, it doesn't even say that whatever's received has to have value of any sort, only that something is gained. Receiving digital items which weren't owner before the wager is a gain.

 

 

But regarding the interpretation of Value, it's notable that the lawyers presenting the lawsuit against EA in California and other places regard EA's loot boxes to be violating gambling laws, and they argue that the in-game items received from look boxes are items of value. Belgium ruled that loot boxes constitute gambling, and so EA is no longer allowed to offer them in that country. The UK’s Digital, Culture, Media and Sport Committee has advised the UK government to regulate loot boxes under the UK's gambling laws.

 

So, in the eyes of various governmental groups and legal experts, Value doesn't strictly mean something that's able to be easily transferred into real-world money.

 

So is the Windows OS and all the games sold on GoG, Steam, EGS, Uplay, etc.

Oh, to be 100% clear I'm not disagreeing with the sentiment, at all. I totally agree they should be gambling.

 

I'll include me edit where I outline why I think the current laws are wrong

Quote

Edit - Its also important to talk about the term "game of chance" as IMO this is actually where current laws fall short. The phrase "game of chance" has an inherent inference that there is a chance to either win or lose. You pay money/goods and you might walk away with something more valuable or you might end up with nothing. The thing with lootboxes is there's no chance of losing, you're always going to get something and the 'value' of the item you get is determined by its rarity.

 

Digging even deeper into this you can also say the phrase infers there's a chance the house might lose. Its entirely possible for someone to walk into a casino, place one bet and walk away with the jackpot. In the case of lootboxes there is no chance for the devs to lose, at all. Its actually closer to paying money for goods and services than it is to a game of chance for them. They have total control over what happens in their game, in a casino there is an element of luck & skill involved. Cards have 52 in a deck, craps has 100s of possible outcomes etc etc.

 

Currently lootboxes fall into the same category as sticker packs and trading cards. The reason why (at least IMO) this shouldn't be the case is because lootboxes employ tactics that are used in casinos to keep players spending money. Everything is bright and shiny, there are flashing lights and sounds and items are revealed slowly. All these tactics are designed to stimulate players into forgetting they are spending money and to focus purely on that one item they have made so rare.

 

I think the problem stems from the fact that current laws were drawn up LOOOOOONG before digital items ever existed. When current laws say 'value' they literally mean real world value since back then, digital value didn't even exist.

Quote

When a publisher argues that loot box rewards don't have real-world value, they're undermining their ability to justify their interests against software piracy. If those items don't have monetary value, then it cannot be said that people are causing publishers any monetary damages by pirating their software products.

Now that is a very interesting point. Its way off topic but if its OK with you I'm gonna bank that one. It might be useful in the future.

[Delicieuxz]

3 hours ago, Master Disaster said:

They have total control over what happens in their game, in a casino there is an element of luck & skill involved. Cards have 52 in a deck, craps has 100s of possible outcomes etc etc.

Not every casino game involves an element of skill. Slot machines, for example.

[Mark Kaine]

Yeah so far these regulations don't really do anything (it might be regionally different of course) you can still gamble unlimited amounts for 'waifu jpgs' in a multitude of mobile apps, not to mention the usual lootbox shenanigans didn't seem to have slowed down much if at all either? 

[iuraf]

Same shit, different story. Money and greed are the root of all evil. In my opinion, EA is a great company, but with a greedy management. I mean, every since they have introduced loot boxes, many games have been just terrible. Kids borrowing money from their parents, or even worse, stealing.. it's a very concerning situation. I like to gamble from time to time, but I am not a kid anymore. Websites like Brazino777 or other online casinos do not allow kids. But EA doesn't give a shit and that''s messed up.

[Bombastinator]

This makes how many countries EA is getting sued in for this?